Xyrus

Low Share Price CEFs Have Significant Advantage in a Market Recovery

Those huge yields should be big blinking red warning signs. How much of those distributions is ROC?

According to CEFA, the answer is MOST OF IT. One of the reasons why the prices are so low is that they are depleting their asset base by returning it to their investors. That is not a good thing.

When it comes to CEFs and their distributions, you need to be very careful. The CEFA site allows you to look at income yield vs. market yield. If you see something returning a market yield of 15% but their income yields is only 5%, you might want to take a harder look at the CEF.

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